Which of the following attributes of the recession of 2008-2009 is most supportive of the Keynesian view that the crowding-out effect will be minimal during a severe recession?
a. the immediate increase in output and employment generated by the budget deficits of 2008-2009
b. the decline in the general level of prices during 2009
c. short-term interest rates falling to near zero, despite growing budget deficits during 2008-2009
d. short-term interest rates falling to near zero, as the budget deficit declined during 2008-2009
C
Economics
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During the Financial Crisis of 2007-2009, banks significantly increased their holdings of excess reserves. What impact did this have on the money multiplier? How would the Fed change the monetary base if it wanted to maintain a stable money supply?
What will be an ideal response?
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Year 2 nominal GDP is
A) $200. B) $270. C) $310. D) $390.
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